Toys"R"Us grows omnichannel capabilities in Europe
Efforts to transform the customer experience and optimize e-commerce capabilities at Toys”R”Us are getting a boost in Europe with a new distribution center.
The retailer says it has completed a new distribution center in Saint-Fargeau-Ponthierry, France, to support the company's rapidly expanding e-commerce business throughout the country and in select sections of Europe.
The 550,000-square-foot facility will service retail distribution to the country's 48 store locations and e-commerce operations throughout France, as well as expedite online order fulfillment to customers in Belgium, Luxembourg and Monaco.
Located approximately 29 miles south of Paris, the logistics campus became operationally functional in late May, and the adjacent headquarters for Toys"R"Us France is scheduled to open on June 22. The Saint-Fargeau Logistics Campus, inclusive of the fulfillment center and headquarters office, will employ approximately 350 full- and part-time employees at the peak of the holiday season.
"Integrating our three previous fulfillment centers in France into one central logistics hub creates greater operational efficiencies for our business, while allowing us to better serve our customers through our growing omnichannel capabilities in Europe," said Antonio Urcelay, CEO, Toys"R"Us, Inc. "The Saint-Fargeau Logistics Campus provides us with a single point of distribution from which to ensure the hottest toys and baby products are always available for consumers, whenever, wherever and however they choose to shop with us."
Chosen for its strategic location near Paris, the Saint-Fargeau Logistics Campus features more than 20 receiving areas, nearly 60 shipping docks and services up to 80 trucks per day. The building contains a technologically advanced and environmentally friendly automated conveyor system, significantly increasing overall service and storage capacity.
As a result of these enhancements, inbound and outbound transport from the facility will be greatly streamlined. Customers throughout France will benefit from the augmented rapidity, product availability and overall quality of product preparation, whether shopping in-store or online. Earlier this year the company outlined its “TRU Transformation” strategy designed to slow the company’s sales decline, strengthen margin and improve EBITDA to effectively position the business to become fit for growth.
Company-wide efforts will focus on four key priorities:
Continue to transform the customer experience in-store and online. Initiatives underway to improve the shopping experience for customers will expand over the course of the year. Additional stores have been identified for investments in interior and exterior physical improvements, and the elevated maintenance and lighting standards introduced last year will continue in all stores. The company is also placing a renewed focus on its Babies“R”Us business, in order to strengthen its specialist position in differentiated service, products and offerings. In advancing its goal to become a more customer-centric business, consumer insights will help guide the company in making service and selling improvements, and a deeper integration with its loyalty program will be concentrated on driving more special occasion visits year-round.
Optimize the e-commerce business. Now, with an over $1.2 billion global e-commerce business, the company’s focus is to continue to grow profitably online. An end-to-end assessment of the online business is underway to identify key areas for functionality and process improvements. In the coming year, the company plans to further strengthen its omnichannel capabilities, including in-store pickup and ship from store execution, especially during the peak holiday season. Mobile growth has rapidly become the most important driver of its e-commerce traffic, with 57% of Toys“R”Us, U.S. digital visits coming from a mobile or tablet device. The company plans to work quickly to advance its mobile capabilities to better serve the needs of its customers.
Grow internationally and leverage global scale to drive category leadership and differentiation. Toys“R”Us has a strong international presence across 36 countries outside of the U.S. Over the coming year, the company expects to continue to grow internationally, particularly in China and Southeast Asia. It will also fully leverage its scale and worldwide presence to deliver a coordinated and strategic approach to key merchandising decisions.
Right-size the cost structure and design a more efficient, streamlined organization. As part of its Fit for Growth initiative, the company continues to seek substantial cost and working capital savings opportunities through process and operating model improvements. Last year, the company identified potential cost savings of $150-200 million primarily in U.S. SG&A and cost of goods. Over $100 million of this was achieved in fiscal 2014 and the additional $50-100 million is expected to be fully realized by fiscal 2016. In addition, the company recently identified $50-75 million of potential savings in its international operations, which it expects to achieve by the end of fiscal 2016.
Toys"R"Us merchandise is sold in 866 Toys"R"Us and Babies"R"Us stores in the United States, Puerto Rico and Guam, and in more than 730 international stores and over 240 licensed stores in 37 countries and jurisdictions.